Monday, April 30, 2012

ArcelorMittal is the world’s leading steel and mining company, with 100 million tonnes of annual production capacity and 260,000 employees across 60 countries and annual sales of $78 billion. I tried to imagine what 100 million tonnes of steel looks like. But I scored a blank. All I know is that 100 million tons of ice cream would look a whole lot nicer :). But I do have an idea of what 2,000 tonnes look like - yes, you guessed it - the ArcelorMittal Orbit.

The ArcelorMittal Orbit is a sculpture and public viewing platform was designed by Anish Kapoor and Cecil Balmond. It is 114.5 meters tall, and is the UK’s tallest sculpture, 22 meters taller than the Statue of Liberty. The Orbit is planned to become a new visitor attraction with views of up to 20 miles, encompassing the entire Olympic Park and London’s skyline, and is now all spanking, shining new, waiting for the Games to start. Visitors will be able to take a trip up the structure in a lift and then walk down the spiral staircase of 455 steps. Read more about the Orbit and see more photos at the Orbit website.

ArcelorMittal is no stranger to Sustainability Reporting and produces an annual report of the Company's sustainability activities both at a global level and also at several of the company's locations around the world. Going with the tagline Safe Sustainable Steel, the ArcelorMittal's 2010 Sustainability Report is a 49 page GRI Level C+ report with external assurance. After the opening section which talks about strategy, business profile and core stakeholders, the report has four core sections which have become the template framework for the local reports around the world: Investing in People, Making Steel More Sustainable, Enriching our Communities and Transparent Governance.

In 2010, ArcelorMittal spent $347million in environmental technology modernization to support reducing carbon emissions, launched a new Human Rights policy and became the fifth steel company to be included in the Dow Jones Sustainability Index.

I counted 12 local reports for 2010, in addition to the global effort, and most are produced both in the local language and in English. While there is a common outline structure and some overlap of content, and an orange-tangerine color supporting the basic design of most reports, the local reports are independent and distinctive representations of local performance at impressively high quality. Of the local reports I could read (i.e. those in English), I noted a very clear set of personalities coming through.

Argentina's report is called "Transforming Tomorrow" and is a GRI Level B Report of 80 pages with strong sections on employee health and community involvement and a feedback form at the end. It contains some interesting perspectives from local journalists, and a nice interview with the External Affairs Manager who says: "Making the Sustainability Report allows us to outline a new way of stakeholder engagement involving all the areas, working to identify common points of interest and setting goals for each of them."

Brazil's Report is called "Looking forward to Tomorrow's Steel" and is a 71 page GRI Level B report and contains interesting persepctives on the Brazilian steelmaking industry, details of an Organizational Climate Survey covering over 19,000 employees in the LATAM region, and a strong emphasis on employee health and safety. Biodiversity features strongly in this report, with interesting detail of how biodiversity is affected in all parts of the LATAM region managed through the Brazil subsidiary.

India's Report (covering 2009) is a 40 page, non-GRI first report for this country, and full of the Indian flavors and spices that make this report highly Indian, and truly distinctive. It doesn't follow the 2010 template structure, instead focusing on social impact and community engagement, providing detailed context about the poverty, lack of literacy and chronic health issues in the tribal communities where ArcelorMittal is active, and the nature of the company's efforts to alleviate these problems.

Mexico's Report is a 12 pager and somewhat more compact than the rest of the local issues, with no GRI framework, but it contains plenty of Mexican faces and some local flavor. It follows the four topic template with meticulous care: 2 pages per topic (one page on Governance).

Poland's Report is a 41 page report, the first for this subsidiary, not GRI, with some great photos and many quotations from local Managers. Its focus is the significant impact the Polish business of ArcelorMittal has on the local steel industry, as the largest steelmaker in Poland.

The South African Report, entitled "Bold Spirit" is the only report which is not a standalone, and is included in the 216 page Annual Report for ArcelorMittal in South Africa. It includes a GRI Index for the sustainability content but no application level. It does not follow the sustainability report template and is less attractive as a sustainability report, but it includes a great section on the role of steel in society and description of the different impacts.

The USA Report is a 23 pager, not GRI, and follows the global template quite closely, with a clean design and short case studies interspersed with the narrattive. It includes a nice section of Key Performance Indicators and progress made against these to date.

It is quite impressive that ArcelorMittal has so much to say in key countries of operation and makes the effort to deliver meaningful report to all local stakeholders. Despite the different lengths, frameworks and approaches of ArcelorMittal local company reports, the local reports are, in my view, highly relevant and highly valuable. What would be an improvement for future years accross all reports is a materiality analysis, and greater disclosure of the feedback of stakeholders and how this has been incorporated intho the ArcelorMittal sustainability strategy.

I asked Meera Pau Mehta, ArcelorMittal Corporate Responsibility Program Manager, who has responsibility for implementation of the Human Rights Policy and the development of the Corporate Responsibility Report, what the payoff is for ArcelorMittal in producing so many reports. She said, quite simply, "Accountability and driving performance".

Meera said that "The global report is led by the group corporate responsibility team. Local reports are compiled by the local Corporate Responsibility teams, with support from the corporate team. The Group report addresses global issues, and those that are relevant to our global stakeholder groups. To keep the Group report succinct, we cannot include all the topics that are important to different local stakeholder groups. This is where local reports really make a difference – they address the topics that are most important to local stakeholders, and in the local language."

Meera added: "I love the variety of my role: I can be working on topics ranging from human rights to reporting to supplier capacity building. I have a great opportunity to shape our response to these important topics. "

Hear more from Meera at the Smart Sustainability Reporting Conference on 15th May, where she will be talking about "Increasing transparency and driving performance: from global to local corporate responsibility reporting". I am looking forward to it! (If you haven't registered yet, contact me for a discount code!)

Sunday, April 29, 2012

On April 19th, I participated in the CSR Data Management Forum (conference site now no longer online), an entire day devoted to the cycles of processes involved in pulling together all the relevant information for sustainability transparency, starting with Data Collection, through Data Evaluation, Assuring the Data, Communicating CSR Data and a closing discussion, which I chaired, on Pulling it all Together. It's rare that a CSR conference is devoted specifically to the data management cycle and credit here is due to Paul Scott, MD of CorporateRegister.com who came up with the idea and opened up the proceedings. While data collection has an undisputable place in performance management, the focus of this day, was data collection for CSR transparency - either in the form of CSR Reports or in the form of CSR data submission to data aggregators such as the Carbon Disclosure Project or index-generators such as the DJSI.

Can Excel do the job?
The first session opened up with a debate between Credit360 (Iain McGhee) and Best Food Forward (Craig Simmons) who had been briefed to present opposing views about the merits of software systems for sustainability data management. Credit360 is one of the leading providers of sustainability software. After mentioning that only 24% (according to research by Ernst and Young) of reporting companies use software to gather their data, Iain McGhee went on to explain the types of software available. There is SaaS, Software as a Service, which is web-based, hosted by the provider (in the cloud) and enables input via the internet, and "on-premise" software, which means installing the software program on a company's servers and managing it technically in situ. If you are considering a software solution, SaaS seems to be the preferred option, as it doesn't require tons of technical work from your IT people and it is quite significantly lower cost. But, if only 24% of companies are using software, what are the rest using? Of course, we all know the answer to that: Excel! The good old spreadsheet option. On behalf of Credit360, Iain McGhee presented a detailed analysis demonstrating that Excel is wholly inferior for several reasons, such as lack of audit trail (anyone can make changes, which are not retained or identified by user), breaks in formulas which can disrupt entire data-sets and are hard to identify, lack of dashboard-type presentation tools, no solution for qualitative data and more. Just to whet our appetite, Iain referred to the Telefonica site as an example of how software-based tools can help generate fabulous interactive data presentation on websites.

Craig Simmons, on the other hand, works from the basis of two premises: (1) People think they want software when they really want business outcomes and (2) Specialist software tools are fast losing ground to better and less costly generic alternatives. He calls software tools "dangerously seductive", promising all sorts of seamless solutions when in fact, they have some minefields all of their own, such as difficulty of locating software errors and the need to get far more organized up front before the software can be properly used. Craig says Excel does the job well and quoted large businesses which manage data effectively with Excel. He also talked about the relative merits of online solutions such as Google docs for collaborative processes.

At the end of a rather spirited discussion, a show of hands by conference attendees tended to prefer the software option over Excel. The real question, though, is how many of them will bite the bullet and make the conversion? As a Sustainability Reporter who works with many clients around the world, I have to say that Excel rules and none of my clients use software packages, though I often recommend to them that they should. Though I admit to being pretty nifty with a spreadsheet, or several, these days!

Data normalization - watch the fine print
The next session discussed how to evaluate data and how to present it. Craig Simmons from BestFootFoward reappeared in this session and offered up some great infographic examples of how to make data meaningful. See how far you can travel on a carbon budgethere, and the carbon footprint of a lunchtime sandwich here. One debate arose about presentation of absolute versus relative (normalized) data, and an important insight is the way normalized metrics are calculated. It's possible, for example, to reduce carbon intensity just by enjoying the benefits of currency exchange fluctuations, without actually making changes in the business, if carbon intensity is linked to $ references such as turnover or profit. A common-sense approach taken by many is to measure intensity relative to more meaningful metrics that are true measures of performance such as square meters of offices or factories, number of hours worked or units produced.

The Wild West of Assurance

While the number of Sustainability Reports published each year continues to grow, the percentage of these which are externally assured has remained constant for the past several years. In other words, as part of the reporting landscape, assurance is not gaining momentum. There remain many issues with assurance, the main focus of Session Three, and Ben Murray from Carbon Smart walked us through research conducted by Carbon Smart on assurance which shows that "assurance is not always well understood by stakeholders, there are low levels of uptake by reporting companies and assurance doesn't always deliver the goods!". No surprises there. The level of uptake of assurance with the FTSE 350 showed that 10% of companies do not report and therefore have nothing to assure, 67% do not assure, 4% use a form of "alternative" assurance, such as a panel or student review, and out of the total 350 companies analyzed, only 66 use a valid form of assurance - 19%. Assurance statements of Vodafone plc, BHP Billiton, Associated British Foods, Royal Bank of Scotland and British American Tobacco were singled out as leading the pack, but I haven't looked at these specifically so you can make your own judgment.

Overall, the entire assurance movement remains, to me, a Wild West, and now, as more reports are online, the challenges of effective, meaningful, credibility-advancing assurance for Sustainability Reports are even greater and few have managed to address this competently.

Communicating CSR Data
Peter Knight of Context America came back to the infographics theme and presented some examples of good and bad representations. This one, from Levi's, which is about saving water, was presented as a bad example. It takes forever to understand the message, according to Peter.

On the other hand, this one, from Starbucks, is a simple but effective representation of the Company's progress on ethical sourcing.

While infographics are certainly the New Sexy Thing in CSR (and other) communications, they are hardly the crux of CSR communications. They are fine for the delivery of single, simple, one-focus messages, but not quite the basis of a CSR communications strategy.

Pulling it all Together

Finally, in the last session, which I chaired, I presented some questions to the audience:

If Excel is a black hole for data errors, why is the market not moving en masse to SaaS ?

If Assurance is hopelessly inadequate, misunderstood and misrepresentative, is it a good or a bad thing that only a small percent of companies are doing it ?

Is Data the issue or are Business Outcomes the issue? But how do you determine business outcomes without data ?

Can Infographics really save the world ?

Interesting points to ponder until the next CSR Data Management Conference.

A good day, which would have been improved only by, yes, you know, ice cream.

“They know their stuff. They know what they have achieved. Material aspects are included. It is an honest report. They tell what they haven't achieved (although the organization is small and hardly anybody would hold them accountable for any failures). The content makes the readers believe in the organization.”

NGO & Charity, Germany

“It is clear that a lot of effort went into producing this report alongside a heavy workload. The content and style is original and engaging.”

CSR Consultant, UK

“Corporate reports are mostly self-serving. But here comes a company that's started small but thinks big by sharing its ideas which could have been kept for private profit.”

"This is really the most interesting CSR report I have ever read up until now. I laughed while reading. It is full of jokes; it easily gets the message across and remains professional. It is such a pleasure to read it. The "Quick facts" is well done! The "Case Study" offers concrete examples. Though it looks quite lengthy but I didn´t feel it. It is very informative. If I were a potential client, you´ve won me!"

This captures the essence of what we were trying to do with this report - deliver a professional document while making it easy to read and a little fun. That's how sustainability should be!

The Beyond Business report also achieved fourth place in the Best First Time Report category and eighth place in the Creativity in Communications Category . We are proud to have delivered a winning report !! And this is the time to thank each and every one of the CRRA '12 voters who nudged our report into first place. Admittedly, this was the smallest category with only five reports in total, but overall, the category got more votes per report than any other category.

THANK YOU EVERYONE!!!

We believe that any business, no matter how small, can report and can gain benefit from reporting. We also believe that it is important for sustainability consultants to issue reports as a way of demonstrating our personal commitment to sustainability and showing clients that we know how to do it as least as well or better than other firms. "Practice what your preach" goes the old adage. We practice a lot and we preach a lot. And what's more, it's good for business.

Congrats also to the runners up in the SME category, Banarra from Australia and Guelph Hydro Inc from Canada, both of whom delivered great reports.

Saturday, April 21, 2012

Once again, amidst great fanfare, the annual iconic CRRA Awards Winners were announced on the evening of 19th April at a special super-duper gala event in London hosted by CorporateRegister.com, the global CR resources website, which is home to the world’s most comprehensive directory of corporate non-financial reports with close to 40,000 reports from 9,000 companies across 161 countries.

Reports from five countries took the nine first place awards, with the UK and the US gaining three top awards each, and Denmark, Australia and Israel with one each. Countries making the top 27 places (first place and two runners up in each category) include France with one report, Brazil with two reports, Canada with two reports and South Korea with one. All in all, nine coutries are represented in the top line-up, which is a realtively small number, considering that entrants included reports from 29 countries.

The star of the evening was Coca Cola Enterprises Inc., U.S. who took two awards with overall Best Report and Best Carbon Disclosure categories, and a runner up in the Best Relevance Category. This is the first time that Coca Cola has taken the Best Report category, having been pipped at the post by Hewlett Packard or Vodafone in previous years. No doubt, Vodafone will be wondering what happened this year, as this is the first year since the start of the CRRA tradition that Vodafone has not taken one or more first place awards. Marks and Spencer did well in CRRA '12 , with two awards, one each in the categories Best Relevance and Materiality and Best Openness and Honesty.

Novo Nordisk topped the Best Integrated Report category (no surprises!). Novo Nordisk has definitely claimed this category and this time acheived a decisive win with almost double the amount of votes earned by the runners up in this category

It would be remiss of me not to mention that for the first time in the history of the CRRA, a first place award was won by an Israeli report - this was - ahem - the Beyond Business report - my very own report coming in as Best SME Report. Although this was a small category, the level of voting was high and the category received more votes per report than any other category.

Thursday, April 5, 2012

Let me start at the end. After reviewing Accenture's global 2010-2011 Corporate Citizenship Report, recently released, I have been encouraged by Accenture's performance in gender diversity and advancing women. In many ways, I now believe that Accenture is showing leadership in providing a working environment which repects women's leadership and encourages women to advance.

But that's the end. The beginning is that I wasn't fully convinced of this after reading the Accenture Corporate Citizenship Report. Fortunately, I didn't stop at reading the report. I talked to Accenture. And this is the story. From the beginning.

I didn't have time to study Accenture's report in full (it's online and available as a download) but I can never resist having a quick look at new report releases, so I did, just in passing, in-between things. Kinda by auto-pilot, my screen navigated to the page entitled "An inclusive, diverse environment".

What stood out for me on this page is this:

My first reaction was this:

I was disappointed. For the past 5 years, female intake has been static at 34-36 percent. And the number of women senior executives has been static at 16-17 percent of the senior executive workforce. Accenture has a Diversity Council and a Diversity Advisory Forum. There are leadership courses for women and a Women's Network. Accenture celebrates International Women's Day and in 2010, senior women participated in events in 146 locations across 35 countries, and in 2011, events took place in 162 locations across 40 countries. Accenture conducts research every year on women in business, and has Women's Mentoring Programs which pair women with senior executives. Yet only 17 percent of the senior executives are women.

Accenture writes: "Increasing the representation of women and minorities among our leadership and welcoming all diverse employees will remain ongoing priorities for us." For the past 5 years, there appears to have been almost no increase of women representation in the senior executive ranks, despite this having been, apparently, a priority during these years.

It therefore seemed to me that, whatever Accenture has been doing for the past five years, it hadn't worked. Whatever Accenture plans to do for the next five years, has to be different. As I have said in the past, down with womenwashing!. "Fixing" women through leadership programs and women's networks doesn't create space for women to move into leadership positions.

Admittedly, Accenture has three women on the Board of Directors (out of a total of 10 non-management Directors) and 26% (5 out of 19) of its global Executive Leadership Team are women, which stacks up pretty well against most large companies and other companies in this sector. However, this just made me wonder why more women do not achieve senior executive status, and, apart from continuing the current initiatives, what Accenture plans to do differently to ensure that 17% could become more than 17% in the next few years.

But then......

I contacted Stacey Jones, who is Accenture's reporting contact point for Corporate Citizenship to see if there is perhaps an explanation that I am missing. I was totally impressed that Stacey came back to me immediately and we chatted by phone about what Accenture is doing to advance women. This is fabulous responsiveness, way beyond that which I experience from most companies (and I write to many!).

And then ......

From our conversation I understood that the "senior executives" is actually quite a small proportion of the overall management population at Accenture, as 17% is based on a group of some thousand within the company’s population of nearly 250,00 employees. The percentage of women overall in all management positions is much higher.

I also saw that the total workforce increased by 40% in the same 5 years, so the female workforce in 2007 was 61,200, while in 2011, it was over 80,000. This means that absolute numbers of women in senior positions has increased, even if the percentage figure does not reflect this. Maintaining this level, then, actually represents an achievement.

In addition, Stacey talked with passion about the programs to advance women at Accenture, especially the Diversity Council. "Diversity Council membership includes representation of our most senior male and female executives who have key leadership positions within the business. They play important roles in succession planning and sponsoring women to be groomed for leadership positions and ensuring they have the opportunity to advance. I have been here for 18 years, and I personally observe the investment of time and energy that goes into creating an inclusive culture that works for women."

All this was enough to convince me that there is genuine openness and encouragement for women's advancement at Accenture.

And so .....

I changed this post from what have been a rather critical post to one which highlights the value of stakeholder engagement. Here are my five insights:

Number Uno: As stakeholders, take the time to give feedback and ask questions.

Had I not fed back my observations to Accenture, I would have written an overly critical piece. Knowing what I do now, this would have been unjustified. I like being critical :), but I prefer to be fair.

Numero Two: As corporations, listen and be responsive to stakeholders.

My conversation with Accenture provided them with some value. Through my feedback, they were able to gain some new perspectives about how to present their performance in the Corporate Citizenship Report and a couple of insights into aspects of diversity management.

Number Trois: Things are not always what they seem.

It's always worth checking the facts and hearing the other side of the story. It's easy to jump to conclusions, and be judgmental, especially when the numbers seem straightforward. But just asking a simple question led to a great conversation and a much fuller understanding of the situation on my part. It's easy to be critical of companies. It's less easy to take the time and consider a more balanced view.

Nombre Four: Transparency builds trust.

This is the whole point of Sustainability Reporting. Transparency opens you up to scrutiny. It exposes you to criticism and external interventions. As a result, I now have a much higher level of trust in Accenture's reporting, and corporate integrity, and Accenture has avoided what might have been some rather unpleasant publicity, and has gained new insights about their reporting.

If the whole point of Sustainability Reporting is to engage stakeholders, make sure you publish an accessible contact point. It's so frustrating when you send an email and it ends up in a black hole. Accenture's timely and friendly response is a best practice example of stakeholder engagement and deserves a CSR Reporting Blog Double Cone Award.